Osaka Gas has inked a deal to buy into the Woodside-led Browse LNG venture, providing further evidence of sharpened appetite in Japan – the world’s biggest importer of LNG – for new Australian supplies amid doubts about future exports from the conflict-torn Middle East.
The major Japanese utility will buy a 5 per cent stake in the proposed $30 billion-plus LNG venture off Western Australia from BP, just three months after the British multinational sold a similar 5 per cent holding to South Korea’s GS Energy.
The latest deal is further demonstration of increased Japanese interest in the Browse LNG project after Inpex Corporation sought to buy a stake earlier this year in a $US400 million deal that was blocked by Woodside, the venture operator.
MIMI, a joint venture between Mitsui and Mitsubishi, already holds a 14.4 per cent stake in the project, while BP will remain the second-biggest partner in the venture after Perth-based Woodside.
Osaka Gas, which already has a stake in several other Australian LNG projects, said the deal with BP would give it rights over about 550,000 tonnes a year of LNG from the Browse project, which is expected to produce about 11 million tonnes a year in total.
It said that as Browse LNG would also produce gas for the domestic market in Western Australia, the deal “contributes to the energy security in both Australia and Japan”.
Osaka Gas chief executive Masataka Fujiwara said the company looks forward “to working closely with BP, Woodside and other Browse JV participants to advance the project”.
MST Marquee energy analyst Saul Kavonic said the Browse project had gained a lot of momentum in recent months, in part catalysed by Inpex attempting to enter the project by buying PetroChina’s stake.
Woodside stepped in to buy PetroChina’s stake itself to prevent Inpex potentially derailing its plans to process Browse gas through the North West Shelf LNG plant near Karratha. Inpex runs a competing LNG export venture in Darwin, and was expected by analysts to be keen to take Browse gas to Darwin instead of Karratha.
“For the first time ever, there is a high degree of alignment between the Browse and North West Shelf joint ventures,” Kavonic said.
But he said the timeline for approvals for the giant project remained a key hurdle because, while the West Australian government is highly supportive and the project is getting backing from Japan, the pace of federal government approvals remained less certain.
Some say the economics of the project also remain doubtful, given the need to build a 900-kilometre pipeline to transport gas from the Browse Basin off the Kimberley coast to Karratha, and the need to include carbon capture facilities to reduce carbon emissions.
Still, Kavonic suggested that Japanese interests may look to buy more of Browse as they look to diversify supplies away from the Middle East and Russia.
Exports of LNG from Qatar, the world’s second-biggest exporter after the US, have collapsed since the start of the war in Iran, which has almost paralysed exports of LNG and oil through the Strait of Hormuz.
“Japan is likely to have appetite to own more of Browse as it proceeds to a possible final investment decision in 2028 or 2029, as the largest source of new LNG supply within the Pacific, which is particularly attractive” given the need to reduce reliance on those other regions, he said.
The Osaka Gas subsidiary that is buying the stake is to be jointly funded by the Japan Organisation for Metals and Energy Security, a government agency charged with securing stable supplies of oil, gas and minerals for Japan.
Woodside remains the biggest shareholder in Browse LNG, with 41.27 per cent, while BP will hold 34.3 per cent after the latest deal. MIMI owns 14.4 per cent, and GS and Osaka Gas each hold 5 per cent.
Extracted in full from: https://www.afr.com/companies/energy/boost-for-woodside-s-browse-lng-project-as-japan-firm-inks-deal-20260918-p60you
